Fuel prices to drop further

Prices of petroleum products are expected to fall further in the first pricing window of April, the Institute for Energy Security (IES) has said.

Already, the prices have been reduced by oil marketing companies at the pumps twice in the second pricing window of March.

The first reduction is attributed to “favourable market indicators” as projected by IES prior to the beginning of the window.

The second reduction was as a result of the removal of Excise Levy and the review of the Special Petroleum Tax from 17.5% to 15% by the government.

In effect, prices at the pump dropped between 2.69% and 4.56%, according to IES, adding: “At the close of the window, the national average pump price stood at GHS4.21 per litre and GHS4.18 per litre for Gasoline and Gasoil, respectively.”

Over the window, Frimps Oil sold the cheapest Gasoline and Gasoil, with both products being sold at GHS4.145 per litre, IES said.

World Oil Market Prices

The average Platts prices for the second Pricing-window for both Gasoline and Gasoil dropped. The average price for Gasoline was recorded as $502.95 per metric tonne, representing a drop of 5.20% over the previous price of $530.63. Gasoil also dropped 5.9% to average $444.20 per metric tonne.

The Benchmark Brent crude price for the period under review also dropped from $53.5 per barrel to $51.5 per barrel, representing a percentage change of 3.73%. According to U.S Energy Information Agency, crude inventories continue to rise, compelling prices on the world market to drop further.

Local Forex and Fuel Stock

Data obtained from the banking sector suggest the Ghanaian cedi made significant gains against the U.S dollar by appreciating 4.20%, that is from GHS4.52 to GHS4.33 within the period under review.

The inventory of Gasoline and Gasoil in the country rose over the period. Today, Gasoil stock can meet four weeks, five days of national consumption while Gasoline stock can match four weeks, four days of national consumption.

PROJECTIONS FOR APRIL 2017 FIRST PRICING-WINDOW

The price of Brent crude has fallen by 3.73%, Gasoline and Gasoil prices on the world market have also fallen by up to 5.90%, the cedi made significant gains against the U.S dollar, and the stock of fuel in the country has risen substantially. In view of these positive fundamental drivers, the Institute for Energy Security expects fuel prices at the pump to trade up to 1.8 per cent below today’s national average pump prices.